Eastern Railroad Discussion > "The numbers" on Hunter Harrison and his apostles

Barron's has a short piece in yesterday's edition about Union Pacific hiring Jim Vena, who learned Precision Scheduled Railroading at the feet of Hunter Harrison.   The article, by Al Root, notes that PSR is viewed as an absolute by railroaders.  Hated by some, loved by others.  Do more with less, work your assets harder.


The increased optimism is justified. Over nearly three decades, the rails under Harrison’s tutelage outperformed the broader market by 15 percentage points a year. His rails outperformed other railroads by about 10 percentage points a year. That is a remarkable run.


https://www.barrons.com/articles/the-legend-of-hunter-harrison-helps-union-pacific-stock-get-upgraded-51546984322

"Outperformed" others in what manner?   Surely not customer service.   

Rathole Wrote:
-------------------------------------------------------
> "Outperformed" others in what manner?   Surely
> not customer service.   

That is definitely not a metric that they pay any attention to.

If UP's, NS's, etc versions of PSR goes the CSX way, I hate to say it, but we could very well be looking at the beginning of the re-regulating of the railroad industry.  Wasn't it the "robber barrons" of old that brought regulation on railroads in the first place?

The thing is, over the past few years, there has been increasing pressure on the STB and "Feds" to place new regulations on the railroad industry, for example, like reciprocal switching.  Canada now has a form of this (and EHH was in control of both Canadian class ones' at one time or another - coincidence (just speculating and mostly saying that in jest)), so might it not be too far fetched to see it happen here.  Many say that the railroad companies' lobby's are too powerful to let Washington DC to do this, however, much of the push to enact new rail regulations are coming from companies that are bigger, and have a lot more power in Washington DC, than the railroads.  Given enough problems that railroads seem to be causing their customers through their voluntary actions, I think they could be about ready to cut their own throats.

I used to think that forced open access on US railroads was a "never" or "no way" thing.  I'm not so sure any more...



Edited 2 time(s). Last edit at 01/09/19 18:56 by spwolfmtn.

I've been predicting that for a while... Either PSR goes away or re-regulation is on the horizon...

Be specific readers with what your measuring.

The much better performance came basicly on m3asuring financial performance like cash flow, operating income, expense reduction in relationship to revenue.

Switch to the growth in traffic units customers were willing to keep using the railway for, and the answer migh5 surprise you.
Growh under EHH typically was less during his term: and higher after he left.

WHAT are you calling success?
It depends join who you are.

It's interesting what did happen, compared to what could have happened, under EHH rule.

Over the years I have had many conversations with different levels of GTW/CN Employees. And, I'll have been gone 10 years, March 21, this year. Retired officially September 1, 2009.

Before I left, I had what, 9 or 10 years under EHH. And one of the main things I saw happen was Train Travel Time. After we had a new work agreement, which was forced upon us, the different job classifications went out the window. No more Yard Assignments, no more Road Assignments. All of the Transportation Employees, Conductors and Brakemen, were now in just one group. It was DO AS I TELL YOU. For a lot of Yard Conductors and Brakemen, it was a whole new world. Come to work, hop on a train, go to Chicago. Do it the same way tomorrow, but you'll be heading home tomorrow.

And, as could be expected, a LOT of Conductors and Brakemen had never worked the road, had never wanted to work the road, and were now being told to work the road.

So there was a lot of resistance, and train travel times changed. We had a basic 10 Hour Day, straight time until 10 hours and time and a half after that until we tied up.

Before EHH: Trains from Chicago to Battle Creek in under 8 hours was common. And from Battle Creek to Port Huron in under 6 or 7 hours was common. I cannot say what happened in Ontario, but I'm pretty sure the travel time between Sarnia and Toronto in under 8 hours was common.
The Crews would get the train to where it was supposed to be and then tie up and go home.

After EHH: Trains from Chicago to Battle Creek barely made it, many didn't, and had to be relieved en route. Battle Creek to Port Huron, a lot of the same thing. Sarnia to Toronto, like I said above I don't know details, but a good guess would be train travel times increased.

And if by chance we arrived at our home terminals and had time to work, they'd give us a switch list and tell us to go switch boxcars. They would rather we "not" worked for time and a half. So if we had some time, a couple hours, before we got overtime, they'd give us a switchlist. 

I can remember one trip, before EHH, where I was ordered for 13:15. Train out of Markham Yard to Battle Creek. Ordered for 13:15, and we were stopped at Helmer Road, a couple miles west of Battle Creek, at 17:30. Helmer Road was where most of the trains had to stop until they could get through Down Town Battle Creek. Amtrak and NS Trains shared that 3 mile piece of track.

We had some turn-around jobs the last few years before I retired. Ordered at Battle Creek, say 16:00. Head for Chicago. There would be a Chicago Crew ordered for close to the same time, and when we met, we traded trains and headed back to our Home Terminals. There was a Battle Creek Crew on one of the late afternoon Turns, that was RUN RUN RUN....and after EHH, they came into Battle Creek for a couple weeks with like 4 or 5 hours left to work. The Trainmaster would tell them to call the Yardmaster when they got in the building, and everybody with a radio could hear them crying. This happened for about a week, every night they'd come in with time left to work, and cry about not being able to go home. And there was always someone that would make a remark on the radio that maybe they shouldn't get back so soon. And sure enough, it didn't take too many days until they started to get back later and a little later....and a little later....until they were often coming in with very little time to work.

And the rest of the story is, after EHH, train travel times increased substantially, but here's the kicker ---- nobody cared. NOBODY CARED. But, it could have been so different, if EHH had treated anyone decent, it would have been so much better for the CN. I know I mentioned numerous times that if we could have continued to work like we were before EHH, after EHH they would have had to go out and buy a whole bunch of new wheelbarrows to haul all of the money to the banks.

Ron

There are only so many ways you can motivate an employee in any industry.
Time
Money
Advancement

Under the PSR plan and EHH, they take all three away and expect employee engagement.

If my time isn’t valuable to you, you will make me stay once I’m done with MY work. That means take more time doing MY work. No motivation to get it done faster as I’m not going home when done.

If I’m not being paid according to my agreement or not being paid for what you agreed to pay me for the work I do, I try to do ONLY my work. There’s no motivation to get mine done to help you out. Why do more work or go above and beyond when that will become the common demand? Imagine telling the guy you have cut your grass you’d pay him $20 to cut it and $5 to weed eat and come pay day he only got his 20? That doesn’t exactly motivate people to go above and beyond. Speaking about going above and beyond,

No one advances in the railroad industry any more. It’s not worth going from the ranks to management. And if you go above and beyond, managers will find a way to cut another job to add to yours. Efficiency had a price. And that meant jobs cuts and consolidations. How do you convince an employee to do more knowing he will be forced to still do more and you will cut the seniority he has because the company is trying to save a dime by cutting off the only other potential job he can hold?

PSR imo is going to cause reregulation or major changes in the rail industry. The mumbles are already happening and them pushing stock over performance is going to push regulators to do something.

Joe

Posted from iPhone



Edited 1 time(s). Last edit at 01/10/19 07:05 by joeygooganelli.

Good responses, and a perspective large investors only occasionally hear.

Incentives within PSR skew toward capital / owners. That point was obvious in the increase of six hours in transit time on a busy corridor. With a considerable increase in time elapsed for a few hundred dollars in avoided crew costs.

Creating incentives to speed traffic would look a lot different.

Posted from Android

Contrast PSR (EHH’s version and being following to one degree or another throughout the industry) relative to how employees are treated with Southwest Airlines and how Herb Kelleher (RIP) treated employees.  The results speak for themselves not just in the financials that short-term Wall Street analysts use, but in long-term growth and customer satisfaction.  A few quotes attributed to Kelleher:

“If you create an environment where the people truly participate, you don't need control. They know what needs to be done and they do it. And the more that people will devote themselves to your cause on a voluntary basis, a willing basis, the fewer hierarchies and control mechanisms you need.”

“If the employees come first, then they're happy. A motivated employee treats the customer well. The customer is happy so they keep coming back, which pleases the shareholders. It's not one of the enduring green mysteries of all time, it is just the way it works.”

“If the Wright brother were alive today Wilbur would have to fire Orville to reduce costs.”

Today’s JOC e-magazine has an article, “Pressure on US domestic intermodal to up its game”.  The growth rate that railroads have enjoyed the past few years – including in profitability and in some cases stock prices – have had much more to do with the challenges trucking has faced (booming economy coupled with driver shortages/ELD creating constrained trucking capacity) than successful railroad management and operations.  As the economy cools off some and trucking gets more in balance, railroading needs to change its game.  Cost-effective service will be critical. How PSR impacts that does not look promising. I suspect the loss of market share in non-bulk goods will accelerate.  Then we will see how successful EHH and rush to PSR were/are.  I doubt that further damaging employee morale/treatment, that seems a hallmark of PSR so far, will lead to a better long-term future.

Bruce
 

Employees own about 10% of Southwest shares, and have had a direct board access for years.

For its part, the company paid a supplemental bonus of 13% last year, based on profit sharing.

Engaging employees and sharing success is often a good long term strategy.

Posted from Android

Lackawanna484 Wrote:
-------------------------------------------------------
> Barron's has a short piece in yesterday's edition
> about Union Pacific hiring Jim Vena, who learned
> Precision Scheduled Railroading at the feet of
> Hunter Harrison.   The article, by Al Root,
> notes that PSR is viewed as an absolute by
> railroaders.  Hated by some, loved by others. 
> Do more with less, work your assets harder.
>
>
> The increased optimism is justified. Over nearly
> three decades, the rails under Harrison’s
> tutelage outperformed the broader market by 15
> percentage points a year. His rails outperformed
> other railroads by about 10 percentage points a
> year. That is a remarkable run.
>
>
> https://www.barrons.com/articles/the-legend-of-hun
> ter-harrison-helps-union-pacific-stock-get-upgrade
> d-51546984322

See what has been lost is the regards for the workers...OK... the railroad is there to make money...but in days past they were happy with a modest profit and they also cared about their employees.  Not only should they make money but they also  there to keep their railroad family employed.....keep the entity moving!!!!!   Not so anymore with the EHH bull...Greed has taking over.....

in figuring numbers on Harrison, the costs railroads have had to make up after he left is a factor his apostles want to ignore

Ron Wrote:
-------------------------------------------------------
> It's interesting what did happen, compared to what
> could have happened, under EHH rule.
>
> Over the years I have had many conversations with
> different levels of GTW/CN Employees. And, I'll
> have been gone 10 years, March 21, this year.
> Retired officially September 1, 2009

Your story is a great example of what will happen if the rest of the class one carriers follow EHH methods.  It always makes me ill to hear all the lip service that the railroads pay to "safety", but they continue to ignore some of the most critical safety areas, which includes fatigue.  There's been some very visual, and tragic, accidents over the past number of years that have been attributed to employee fatigue.  It has been talked about to death about how the "on-call" nature of working "chain-gang" road jobs make it often impossible for employees to be adequately rested to perform their jobs, not only safely, but productively.  Yet, this story is a clear example that the railroads do not care about this issue, as here, the CN eliminated what "regular" jobs (ie you knew when you were going to work and you had assigned rest days away from work), and replaced them with even more "on call" jobs where it's impossible to get adequate rest before work.  I always joke to friends, if you want to see a real "Walking Dead" episode, go to a railroad crew change point, you'll see many what appears to be Zombies!

If anything, railroads should try to get as many job assignments on regular assigned start times as possible so people can get into a rest routine with their jobs.  It still isn't optimal to work, like "grave yard" shifts, but as for one who has worked them for many years, I was able to get my sleep cycles in line with my work schedule.  However, working "the road" chain gangs, it was impossible for me to get a reliable sleep schedule and I often feared for mistakes that I might make because I was obviously "not on top of my game".

It seems like, all in the name of profits, the carriers are on an all out mission to push the working environments for railroad workers back towards the dark, and deadly, history that we have all learned about in hour history classes.  In addition, this will also just add to the railroads' problem of attracting future employees.  In all fairness, so far, no other major carrier that I know of have taken the draconian measures that EHH did at CN (I think he failed at that mission at CP, though I could be wrong), but I also know there is a lot of fear among my fellow railroaders that the carriers will one day cram a work rules change like this down all of us and make all train operations jobs a on-call, always living with your phone, unable to plan anything, life style.  I only pray if this does happen, that the FRA will force the carriers to finally address this issue of fatigue once and for all.  The railroad I work for has done more "pilot projects" than I can possibly count, but in the end, they never actually make changes that would address this major safety issue.

In the early 1950s the fastest freights (under steam) were scheduled to run from Port Huron to Chicago in 8 hours. 
Dick Eisfeller

Matt Rose expressed the re-regulation fear at a recent convention. STB is putting pressure on the class 1 carriers account demurrage charge increase. PSR is a slippery slope.

Posted from Android